Ireland has built a reputation as an international tech hub but its domestic businesses and public services are falling down on digitalisation, writes Elaine Burke.
This week’s bulletin from the National Competitiveness and Productivity Council (NCPC) paints a concerning picture for Ireland’s global innovation ranking.
Our standing on the Global Innovation Index (GII) is in decline. The annual report issued by the UN’s World Intellectual Property Organisation (WIPO) assesses countries across more than 80 indicators, and Ireland’s rank has been dropping for several years. Though it continues to compare favourably to the EU average, the downward trend cannot be ignored.
Spread across all indicators, Ireland’s assessment has many high points. But there are dramatic lows that are pulling down the overall ranking.
Ireland’s worst performance is in measures accounting for ‘market sophistication’, which covers available credit, investment, diversification and market scale. The NCPC points out that Ireland’s low scores in this section are based on some out-of-date and skewed data. One marker in particular, ranking Ireland in 90th place on domestic credit to the private sector, is calculated as a percentage of GDP. “There are well documented limitations to using GDP as a means of measuring economic activity in the Irish context, given the scale of globalisation-related activities,” states the NCPC in its bulletin. “Any ratio that relies on GDP as the denominator will give a distorted view of Ireland’s performance.”
The NCPC estimates that 26 of the GII’s measurements calculated on these terms will have understated Ireland’s performance. Though the council intends to issue its own assessment to better reflect Ireland’s performance using alternatives such as modified gross national income, this may only see rankings shift by a place or two. It won’t fully write off the areas where Ireland is underperforming.
Ireland trails on ICT access and adoption
Ireland’s score on ICT access is a particular low point in the index, and one which has no relation to GDP. This measure assesses internet access nationally and Ireland placed 62nd out of 130 economies.
In the same collection of measurements, Ireland’s government online service ranked 47th. This measure considers the use of ICTs by governments in delivering public services and Ireland’s failing was perfectly apparent in the NCPC bulletin issued on a website lacking mobile responsiveness and a secure internet transfer protocol.
Ireland’s ICT issue is also seen in the EU’s 2023 European Innovation Scoreboard (EIS). While Ireland is among the ‘Strong Innovators’ cohort and typically outperforms the EU average, the country has seen a significant drop-off in enterprises providing ICT training. A continuation of this downward trend could drag the whole score down.
According to the EU’s Digital Economy and Society Index (DESI), while enterprises in Ireland take advantage of some digital technologies (such as social media, big data and cloud) other technologies such as AI, e-invoicing and electronic information sharing are not so widespread.
This is reflected in further measures on the GII, where Ireland ranks 101st on high-tech imports, its lowest individual ranking. On imports of ICT services, Ireland places 74th.
This is in contrast to the country’s production of digital products and services for other nations. Ireland ranks sixth for high-tech manufacturing and is No 1 when it comes to ICT services exports.
Reputation at risk
Ireland’s innovation prowess, it seems, is in producing technology, but the broader business sector, government and society are failing to apply it.
It’s not enough for Ireland to be a tech hub for the world if it’s not putting innovation into practice in its own industries and services.
A thriving innovation ecosystem is evident across these assessments. On the GII, Ireland’s knowledge workforce and supports for businesses all saw high scores. Ireland ranks No 1 in payments for use of intellectual property and knowledge diffusion, and sixth for university-industry R&D collaboration.
And when it comes to domestic digitalisation, Ireland has set out strategies and targets for improvement. The aim is to have three-quarters of all businesses in Ireland using cloud computing, big data and AI by 2030, and for 90% of SMEs to have a basic level of digital intensity by this time.
“Ireland’s own ambition is to keep up with the most digitally advanced nations in the world,” the latest DESI report notes. “Therefore, the country’s performance will need to keep improving to reach some of the more ambitious targets.”
This requires finally getting the National Broadband Plan over the line and ramped-up support for business and services digitalisation.
The Digitalisation Voucher programme from Enterprise Ireland offered businesses up to €9,000 to support their digital transformation journey, but it hasn’t been open for new applications since June 2022. Another scheme of Innovation Vouchers, which enables access to knowledge providers to tackle a business challenge or opportunity, is declining in use: 389 vouchers were redeemed last year, down from 417 in 2021 and 477 in 2020.
It’s evident across these assessments that Ireland is doing well in sustaining an innovation ecosystem, but if native businesses outside the knowledge economy aren’t engaged, public services remain stuck in the past, and internet access across the country doesn’t get up to speed, it will do damage to our international reputation in the long term.
Source : Business Plus